Social Entrepreneurship

Making a difference through business
If you’re one of those entrepreneurs who wants to help solve some of the world’s problems, this section is for you. And you’re making a wise choice: more and more entrepreneurs are finding that business ventures can make money and improve the world at the same time.
As discussed in the previous section, a traditional entrepreneur sees an opportunity to make money by fulfilling a consumer or business need, usually in an area they’re familiar with. A social entrepreneur sees an additional opportunity to improve quality of life by fulfilling a social need.

What does it mean?
The term “social entrepreneur” is used in many different ways. Ashoka’s and The Schwab Foundation’s definitions (see side bar) aim high. Others define social entrepreneurs as leaders of non-profit organizations that use best business practices to create social change. In for-profit social ventures, a social entrepreneur typically garners the title by simultaneously seeking financial and social returns.
According to J. Gregory Dees, adjunct professor of social entrepreneurship and nonprofit management in Duke University’s Fuqua School of Business, what distinguishes social entrepreneurs is their “explicit and central” mission. They are driven not only by the bottom line, but by a distinct social goal. To quote Dees, “Social entrepreneurs play the role of change agents by:

• Adopting a mission to create and sustain social value (not just private, financial value)
• Recognizing and relentlessly pursuing new opportunities to serve that mission
• Engaging in a process of continuous innovation, adaptation, and learning
• Acting boldly without being limited by resources currently in hand
• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.”
  

Simply put, social entrepreneurs find innovative ways to create better outcomes for society.

Focus on impact
Success in a social venture is achieved by maximizing financial returns and impact to the cause, known as Social Return on Investment (SROI). SROI can come in the form of improving people’s lives or reducing environmental harm. Just as any competitive business must create a product to best satisfy its customer’s needs, a social venture must focus on superior quality for both its customers and its cause (and these may be the same). A worthwhile social venture opportunity should include a marketable idea that also provides non-financial returns to the community you intend to serve.

Idealism will help you construct a vision of what you want to achieve, but to create social value you must find viable ways to produce results. This involves a mix of passion and practicality. As an entrepreneur, you need to shape your plan around what’s realistically possible, even if you continually redefine what is possible. Entrepreneurship is challenging. Adding social aims increases the complexity, but also increases the rewards.

The triple bottom line
No matter what your goals are for your business—to accomplish social change, earn high profits, improve the environment, or all three—it’s useful to think about how you will reach them. To that end, corporate social responsibility (CSR) practices can be integrated throughout your business’ operations. The Business for Social Responsibility defines CSR as, “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment.”

This is what’s called the triple bottom line: expanding the spectrum of values and criteria for measuring organizational success to include not only economic, but also environmental and social concerns. For some, a commitment to CSR brings with it a need to institute triple bottom line reporting.

A good beginning
It can be helpful to incorporate your values from the start. Evidence shows that CSR can help maximize bottom line financial and social benefits. Incorporating your values into the process during the product development stage of your business will help you think of better ideas and evaluate your options more carefully. A philosophy that incorporates respecting people and the environment can be useful in guiding your venture’s growth. Good corporate citizenship will not only give you personal satisfaction, but can resound with employees, funders, customers, suppliers, and your community.